Ertan Özdil at partner day 2019

weclapp SE: “We are aiming at an IPO this year”

weclapp is currently one of the fastest growing cloud ERP systems in Europe. The company has already been named as “ERP system of the year” four times. Now the team around CEO Ertan Özdil wants to tackle global expansion – and the IPO. 

GoingPublic: You offer a cloud-based ERP system. Please explain briefly what distinguishes your software from other solutions. 

Ertan Özdil: Companies need our software to organise themselves and structure all their business processes. The solution is most appropriate for small and medium-sized companies. The system provides them with everything they need to be competitive and grow: Quoting and invoicing tools, order handling, and warehouse management tools and much more. 

Our technology is cloud-based and therefore fully scalable. weclapp is an open platform with an API-first approach and an active community that is constantly contributing new ideas and add-ons. These are attributes that SAP would like to have. We are already ahead of many vendors – in a market that is amidst a revolutionary change of times right now and shifting ever more towards our approach. 

There is a chance that after SAP, another globally successful ERP system may come from Germany. 

Currently, you serve the European market. “Worldwide” sounds like international growth plans? 

 Absolutely. We want to grow worldwide, partly by taking over competitors’ customer bases. Many companies that offer legacy ERP systems will not achieve the step into the cloud-based world. They are under pressure and losing customers, while we are growing rapidly. Companies like those are acquisition targets for us. 

Are there other plans besides acquisitions? 

We have our own research department heading towards creating the next generation of ERP systems: ERP 4.0, artificial intelligence as a service. And of course, we are also investing in the further organic growth of our company. 

Expensive ideas – which you would like to finance via an IPO? 

The weclapp IPO used to be a distant goal to and increasingly becomes a precise plan. We are looking at defined milestones and have already achieved quite a few to a large extent: IFRS annual reports have been prepared and publicised. We have built up an investor relations team and would also like to manage one or two transactions or acquisitions pre-IPO. We are currently working very actively on such projects. Once we have succeeded there, we will be in an optimal position for the IPO. 

Which is to follow when?  

If everything works out fine, in October of this year. 

In Frankfurt? 

Yes, we want to realise the listing in the Prime Standard on the Frankfurt Stock Exchange. 

To what extent does 3U HOLDING AG, which owns the majority of weclapp, provide support? 

With 3U HOLDING AG, we had a financial investor right from the start who wanted to accompany our development stages. The solid financing has allowed us to develop a mature product over the years and to successfully market it from 2013. 

3U is itself listed on the stock exchange – this makes it easier for us to prepare for the IPO. Young companies often hesitate to go to the capital market because they don’t know what to expect, they fear a complex process. Thanks to 3U HOLDING this was easier for us. 

Have you already engaged syndicate banks? 

Out of a shortlist of five well-known German candidates, we will probably ultimately decide on two syndicate banks; discussions are currently underway. 

Why go public instead of bringing other investors on board? 

I have talked to several hundred investors – the idea of the financiers is often: give me a lot of your company and ask for as little money as possible. That’s a rather unfavourable ratio for us. The IPO is simply more charming. 

Especially since the valuation levels are currently high. How is weclapp valued? 

After the conversion of weclapp into an SE, we had a valuation carried out, which amounted to 70 million euros at the time. That capital was incorporated into the SE as a contribution in kind. In the last two years, we were able to exceed our target figures in some cases. We are growing rapidly and are highly profitable. We assume that investors appreciate this and want to realise an IPO, which will bring quite high issue proceeds. Of course, we are not doing this as an end in itself: as I said, we want to invest in our global growth and need sufficient financial resources to do so.  

How do you define “quite high” issue proceeds? 

You understand that I cannot communicate that at this point. 

And how will the IPO be structured? 

It will be anything but an exit by the former owners. Shares will come to the market from a capital increase. Only a greenshoe could also be provided. And then we will first go on a worldwide buying spree. 

Mr Özdil, thank you for the good interview and good luck with the IPO. 

click here for the original interview in German; Interview by Isabella-Alessa Bauer

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